ACCA FA · Chapter 7 · Question 12 of 12
How is the allowance for receivables presented in the statement of financial position?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) It is deducted from trade receivables within current assets
Explanation
The allowance for receivables reduces trade receivables to the amount expected to be collected. It is therefore deducted from gross receivables in current assets. It is not a liability, because nothing is owed to anyone.
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